Candidate Comparison | How Each Candidate Will Affect Small Biz

The election will have a large impact on tax legislation.

As the presidential race heads into the fall both candidates are campaigning hard. Many analysts have said this election will come down to the economy. With that in mind, let’s review each candidate’s position on matters that affect small business.
Code Sec. 179
Currently covers qualifying new property placed in service before January 1, 2013. Dollar limit: $139,000; Investment limit: $560,000
President Obama: Has not addressed
Mitt Romney: Has not addressed
Bonus Depreciation
Currently allows for 100% depreciation for qualified investments made after September 8, 2010 and before January 1, 2012
President Obama: Has proposed extending 100% bonus depreciation
Mitt Romney: Has discussed extending bonus depreciation, but has not indicated a percentage
Research Tax Credit
Currently allows those who participate in research to calculate this credit using the alternative simplified credit method
President Obama: Proposed to make this credit permanent and to increase the alternative simplified credit to 17%
Mitt Romney: Proposed to make this credit permanent
Code Sec. 199 Deduction
Currently allows a qualified taxpayer to deduct an amount equal or less than the phased-in percentage of taxable income or qualified production activities income
President Obama:  Proposed to exclude oil, gas, coal and other producers of hard mineral fossil fuels from this credit
Mitt Romney: Has not addressed
Carried Interest
Currently allows general partners in private equity and hedge funds to charge limited partners a percentage of the fund’s earnings, aka, carried interest, which is characterized as a capital gain
President Obama: Proposed to tax as ordinary income with special rules for partners
Mitt Romney: Has not addressed
They’ve also both taken stances on things like individual rates, deductions and credits, estate tax, and the corporate tax (which we reviewed here).
Tax planning early will be difficult this year, as the presidential election will have a significant impact on tax law. Be sure to check out our October newsletter for even more tax planning ideas that may impact your tax situation for 2012.

If you have questions regarding what tax legislation is on the horizon please contact an H&S Tax Professional.

Source: CCH Tax Briefing